Orders to U.S. factories unchanged as non-durables decrease

Orders to U.S. factories were little changed in November, depressed by a drop in non-durable goods that masked gains for capital equipment which point to a pickup in business investment in 2013.

Bookings, which include durable and non-durable goods, totaled $477.6 billion in November compared with $477.4 billion the prior month, figures from the Commerce Department showed today in Washington. Demand for non-defense capital equipment excluding aircraft, a proxy for future spending, climbed 2.6 percent after rising 3 percent in October.

Sustained gains in employment offer additional evidence that companies are willing to invest and expand as global growth stabilizes and American consumers keep spending on goods such as automobiles even as lawmakers battled over the budget in late 2012. Further pickup in production may depend on a stronger rebound in the global economy and a boost in exports.

“It is surprising that orders were as solid as they were in November,” Kevin Cummins, an economist at UBS Securities LLC in Stamford, Connecticut, said before the report. “In general in 2013, we do have the economy beginning to recover a bit more and growth picking up.”

The median estimate of 55 economists surveyed by Bloomberg projected a 0.4 percent advance in factory bookings. Estimates ranged from a drop of 0.7 percent to a gain of 1.3 percent. The gain in October was unrevised at 0.8 percent.

Payrolls Rise

Another report today showed payrolls rose by 155,000 workers in December following a 161,000 advance the prior month, according to the Labor Department. The increase was in line with the median estimate of economists surveyed by Bloomberg. The unemployment rate held at 7.8 percent after the November figure was revised up from a previously reported 7.7 percent.

Factory employment climbed by 25,000 workers, the biggest gain since March, the report also showed.

Demand for non-durable goods, which is often influenced by swings in prices, decreased 0.6 percent, led by a 2.9 percent drop for petroleum and coal products. Booking for durable goods rose 0.8 percent.

Today’s estimate of orders for capital goods excluding aircraft and military equipment, and including items such as computers, engines and communications gear, was little changed from the 2.7 percent increase the Commerce Department estimated in its Dec. 21 durable goods report.